By way of Order 7/24, of 20 December 2024, the Angolan Central Bank (BNA) published the Operational and Prudential Regulations applicable to Development Banks. Below is a summary of the Regulations:
- Purpose – Development Banks are engaged in providing medium and long-term financing to the private sector to support projects aimed at the economic and social development of Angola. Development Banks may also finance government/public projects.
- Permitted Activities – Development Banks may engage in the following specific activities:
- Finance projects aimed at increasing domestic production of goods and services and supporting domestic producers;
- Invest in strategic projects to improve production chains;
- Invest/manage the financial resources of Public Funds;
- Provide training and technical assistance to SMEs (small and medium enterprises);
- Finance projects to increase the export of Angolan products and services;
- Finance projects for scientific and/or technological research and education;
- Finance private projects in the areas of health, education, sports, housing, food production, environment, rural development, urban services and social projects;
- Support Angola’s industrial capacity.
- Prohibited Activities – Development Banks may not engage in the following activities:
- Receive deposits;
- Open accounts for local government entities;
- Manage Investment Funds;
- Invest in real estate, except purchase of assets for own use;
- Any operations in the capital markets;
- Finance, provide guarantees or invest in any financial institutions, or real estate companies/brokers
- Financing – Development Banks may seek financial resources from any national or international sources. They may only finance Angolan companies/nationals.
- Governance – Development Banks are subject to the governance rules contained in BNA Order 1/22, of 28 January 2022.
- Own Funds Requirements – Development banks are subject to the following own funds requirements:
- Regulatory Own Funds Ratio – 6%
- Tier 1 Own Funds Ratio – 4%
- Tier 1 Principal Own Funds Ratio – 2.5%
- Leverage Ratio – 5%
- Trading – The trading book/portfolio of Development Banks cannot exceed 10% of their total assets.
- Ownership of Non-Financial Companies – Development Banks may not own (directly or indirectly) more than 25% of any non-financial company for a period longer than 5 years.
- Liquidity Requirements – The following minimum liquidity requirements must be maintained:
- Local Currency Liquidity Risk Ratio – 10%
- Local Currency Observation Ratio – 100%
- Foreign Currency Liquidity Risk Ratio – 50%
- Foreign Currency Observation Ratio – 150%
- Reporting to BNA – Development Banks must report prudential and accounting information to BNA as provided in specific legislation.
- Accounting – Development Banks must adopt the Accounting Regulations applicable to Banking Financial Institutions (Plano de Contas das Instituições Financeiras Bancárias).
- External Audit – They are subject to BNA Order 12/23, of 4 December 2023.
- IT systems – Development Banks must implement IT systems which is capable of generating and storing accurate, reliable, complete and timely information about their activities.
Existing Development Banks must bring themselves in full compliance with these Regulations within a period of 90 days.
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